Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $1.6M (vs $2.1M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $802K | $802K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $772K | $22K | $794K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $123K | $365K | $488K | $1.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $26K | $26K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 49.9% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $200K | $401K | $601K | $802K | $802K | $802K | $802K |
| Denial Rate Reduction | $0 | $198K | $397K | $595K | $794K | $794K | $794K | $794K |
| A/R Days Reduction | $0 | $163K | $325K | $488K | $488K | $488K | $488K | $488K |
| Clean Claim Rate | $0 | $13K | $26K | $26K | $26K | $26K | $26K | $26K |
| Cumulative | $0 | $574K | $1.1M | $1.7M | $2.1M | $2.1M | $2.1M | $2.1M |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $2.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 105% / 36.2x | 110% / 40.6x | 114% / 45.0x | 116% / 47.2x | 118% / 49.4x |
| 9.0x | 100% / 31.9x | 104% / 35.8x | 109% / 39.7x | 111% / 41.6x | 113% / 43.6x |
| 10.0x | 95% / 28.4x | 100% / 31.9x | 104% / 35.4x | 106% / 37.1x | 108% / 38.9x |
| 11.0x | 91% / 25.5x | 96% / 28.7x | 100% / 31.9x | 102% / 33.5x | 104% / 35.0x |
| 12.0x | 87% / 23.1x | 92% / 26.0x | 96% / 28.9x | 98% / 30.4x | 100% / 31.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 75% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.6x, adding 6.8 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $497K | — | $497K | 1.2% |
| Year 1 | $512K | +$1.4M | $1.9M | 4.8% |
| Year 2 | $527K | +$2.1M | $2.6M | 6.6% |
| Year 3 | $543K | +$2.1M | $2.7M | 6.6% |
| Year 4 | $559K | +$2.1M | $2.7M | 6.7% |
| Year 5 | $576K | +$2.1M | $2.7M | 6.7% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Cost to Collect | $401K | $601K | $802K | $962K |
| Denial Rate Reductio | $397K | $595K | $794K | $952K |
| A/R Days Reduction | $244K | $366K | $488K | $585K |
| Clean Claim Rate | $13K | $19K | $26K | $31K |
| Total | $1.1M | $1.6M | $2.1M | $2.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 230 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.2% | -14.0% | 0.2% | 11.7% | P51 |
| Net-to-Gross | 16.6% | 19.4% | 30.8% | 49.9% | P17 |
| Occupancy | 90.9% | 33.8% | 56.6% | 73.6% | P97 |
| Rev/Bed | $691K | $326K | $544K | $1.0M | P62 |
| Exp/Bed | $683K | $330K | $492K | $1.1M | P60 |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.